Two prominent health policy experts are warning that a little-known feature of America’s health insurance system is causing unnecessary deaths by discouraging insurers from investing in disease prevention and chronic care management.
Writing in STAT, University of Pennsylvania’s Ezekiel Emanuel and Vanderbilt’s John Graves argue that “churn”—the frequent switching of health insurance plans—creates perverse incentives that transform America’s healthcare into a “sick care system.”
The problem affects 15-20% of publicly and privately insured Americans who change coverage each year. In Medicaid, about 20% of beneficiaries leave annually, with 8% returning within a year. Among those in ACA exchanges, 26% switch insurers or leave altogether yearly. Even Medicare Advantage sees 18% of enrollees change plans annually.
This constant movement destroys insurers’ incentive to invest in prevention, the authors contend. When a company pays for mammograms, diabetes management, or vaccines today, the financial benefits—avoided chemotherapy, prevented heart attacks, or forestalled complications—often accrue to a different insurer years later.
“Insurers’ preventive investments [are low] because insurers cannot internalize all investment cost savings as consumers may leave the insurer in the future,” the authors write, citing economic research.
The consequences are deadly. Despite cervical cancer being almost entirely preventable, more than 4,300 American women die from it annually. Nearly half of the 120 million Americans with high blood pressure don’t know they have it, and fewer than 25% have it controlled. Eight million diabetics remain undiagnosed.
Insurance companies spend a “measly 2% or less” of premiums on prevention in ACA exchanges, the authors report. Meanwhile, fewer than 20% of eligible adults have received both shingles vaccine shots, and only one-third of hepatitis C patients receive cost-effective treatment.
Emanuel and Graves propose establishing five-year enrollment periods across all insurance types rather than annual contracts, extending insurers’ time horizons and incentivizing prevention investments. Some Medicare Advantage CEOs have already begun advocating for multiyear enrollment to “drive positive patient health outcomes.”
The situation may worsen dramatically. “Tragically, Trump’s 2025 tax bill including $1.1 trillion in cuts to Medicaid and ACA marketplaces will exacerbate churn. The bill will cause about 15 million Americans to lose health coverage by 2034. The cuts and additional red tape will push many who lose insurance to stay uninsured,” the authors warn.
“Others who lose will struggle to get re-enrolled with what they had or find other coverage. This represents a supercharging of churn for health insurance coverage in the U.S. for the next decade. That deadly ailment churn must stop disincentivizing prevention and killing Americans.”